News in brief - Jan. 2/9, 2006

Ariz. sues over drug prices - Medicare drug enrollment problems

Ariz. sues over drug prices

Arizona Attorney General Terry Goddard sued 42 drug firms in December 2005, accusing the manufacturers of inflating prescription drug prices and pocketing "tens of millions of dollars in illegal profits" at the expense of Medicare and Medicaid.

The lawsuit also alleges that to boost sales, drug manufacturers gave financial incentives to doctors and pharmacies that were not offered to federal government programs.

The lawsuit does not name any doctors as defendants but says some might have participated in the fraud as "co-conspirators." The state alleges that the company sold doctors the prescription medications at a discounted rate and that physicians were then able to charge Medicare and Medicaid a higher rate than what they paid.

Medicare drug enrollment problems

Some of the roughly 6 million people eligible for Medicare and Medicaid may not be automatically enrolled in a Medicare drug plan as planned on Jan. 1, a recent report said.

The Government Accountability Office said in December 2005 that the Centers for Medicare & Medicaid Services' plan to pick a drug plan for such "dual-eligibles" might fall short. Problems could arise in locating beneficiaries and in ensuring that adequate contingency procedures exist for those who find they no longer have access to their particular drugs.

"While we credit CMS for taking steps to mitigate potential risk for dual-eligible beneficiaries, the agency's complete confidence in contingency plans that have yet to be fully tested, publicized or implemented may be premature," the report states.

In a written response, CMS rejected any implications that the agency is unprepared for the transition.